Neighbors envy, owners pride: Leaving Bengaluru behind, Hyderabad experiences 270% increase in office space absorption

Hyderabad: In the July-September quarter, Hyderabad has emerged as the frontrunner in India's office space market, witnessing a significant upswing in both leasing and new supply.

According to Vestian, a leading real estate consultant, the city experienced a remarkable 270% increase in the absorption of office space, reaching 3.7 million square feet. Simultaneously, new office space supply in Hyderabad soared by 175%, totaling 5.5 million square feet during the same period.

Contrastingly, Bengaluru faced a downturn with a 28% decline in the absorption of office space, amounting to 3.6 million square feet. Additionally, new supply in Bengaluru dropped by 25%, totaling 2.7 million square feet during the July-September period, as reported by Vestian.

The comprehensive report covering the top seven cities in India unveiled a 21% growth in office leasing and a 26% increase in new supply during the third quarter of the calendar year.

Shrinivas Rao, CEO of Vestian, highlighted the heightened activities in the Indian office sector during Q3 2023, noting the highest absorption levels since the pandemic and a surge in new completions.

Commenting on the demand-supply trend, Rao emphasized, "The key office markets in Southern cities evolved and commanded the highest share of the pan-India absorption and new completions."

Rao further predicted a potential rise in rentals in Southern cities, including Hyderabad, as several large corporations encourage their employees to return to office spaces, signifying a resurgence in demand.

Office Market: Demand-Supply Dynamics (Gross Leasing):

- Hyderabad: Absorption - 3.7 million sqft, Y-o-Y Change - 270%

- Bengaluru: Absorption - 3.6 million sqft, Y-o-Y Change - (-28%)

- NCR: Absorption - 3 million sqft, Y-o-Y Change - (-14%)

- Mumbai: Absorption - 2.3 million sqft, Y-o-Y Change - 21%

- Chennai: Absorption - 2 million sqft, Y-o-Y Change - 82%